Schaffner holds its own in a more challenging environment

Media Release

Schaffner holds its own in a more challenging environment

Weak automotive sector and slowdown in China's economic growth dampen momentum

In the first half of fiscal 2018/19, the Schaffner Group‘s three divisions performed very differently. EMC division confirmed last year’s strong result, actually slightly improving its profit margin. Following the completion of restructuring, Power Magnetics division’s sales increased to a small extent while reducing its losses. The Automotive division, which has been highly profitable in recent years, posted a significant decline in sales and earnings as a result of the marked downturn in the global automotive market.

Following the record sales achieved by the Schaffner Group in the last fiscal year, the economy lost momentum in the first quarter of the current fiscal year. In particular, the significant weakening of the global automotive market and the slowdown in growth in China had a particularly strong impact on the Schaffner Group's half-year results for fiscal 2018/19. Year-on-year, order intake decreased by 6.4% to CHF 107.1 million (PY: CHF 114.4 million). Net sales decreased by 6.3% to CHF 101.4 million (PY: CHF 108.3 million). In local currencies, the difference was -5.0%. New orders exceeded sales in the first half of fiscal 2018/19 and the book-to-bill ratio was positive at 1.06.

Schaffner achieved an operating profit (EBIT) of CHF 5.3 million in the first half of fiscal 2018/19 (PY: CHF 9.0 million). The EBIT margin was 5.2% (PY: 8.3%). Adjusted for one-off effects (restructuring of the Power Magnetics division, insurance benefits following a plant fire in Thailand), which had had a positive impact on the previous year's result, the decline in EBIT was CHF 2.2 million. Net profit for the period fell to CHF 3.5 million (PY: CHF 4.0 million). Adjusted for the mentioned one-time effects and the impact of the US Tax Cuts and Jobs Act in the previous year, the difference amounted to CHF -1.6 million. Earnings per share (EPS) amounted to CHF 5.52 (PY: CHF 6.24). The gross margin was 28.3%, as in the previous year. Free cash flow was CHF -1.1 million (PY: CHF -1.6 million).

Broad foothold in the core markets

Schaffner still has a broad sales base in its core markets. In the first half of fiscal 2018/19, 23% of Group sales came from the core market of energy-efficient drive systems. Automotive electronics sector contributed 19%, followed by power supplies for electronic devices and rail technology at 14% each and machine tools and robotics at 13%. Europe was the largest market region at 46.1%. Asia contributed 32.6% while 21.3% came from the Americas.

EMC division

The EMC division exceeded last year’s excellent result with an EBIT margin of 14.0% (PY: 13.6%). Only the slowing momentum in China held back further growth. At CHF 54.3 million (PY: CHF 55.5 million) and CHF 7.6 million (PY: CHF 7.5 million), net sales and EBIT in the first half of fiscal 2018/19 were in line with the strong previous year. Order intake in the first half of fiscal 2018/19 exceeded net sales. In the power quality market Schaffner further increased sales of the new generation of harmonic filters and slightly increased its share of divisional sales.

Power Magnetics division

After completion of restructuring, in the first half of fiscal 2018/19 net sales at the Power Magnetics division amounted to CHF 27.7 million (PY: CHF 27.1 million). EBIT improved to CHF -2.0 million (previous year including restructuring costs: CHF -4.5 million). The EBIT margin was -7.1% (PY: -16.7%). Order intake significantly exceeded net sales by just under CHF 4 million. Demand was strong, especially in Asia and the Americas. In Europe, customers have postponed two major projects, which could slightly delay reaching the break-even point in the Power Magnetics division.

Automotive division

After the downturn in the global automotive market at the end of fiscal 2018, Automotive division's net sales in the first half of 2018/19 were CHF 19.5 million (PY: CHF 25.7 million), significantly below the high levels achieved the year before. EBIT fell substantially to CHF 2.3 million (PY including one-time effects: CHF 8.9 million). The EBIT margin was 12.0 % (PY: 34.5% and before one-time effects 23.6%). Order intake in the first half of fiscal 2018/19 slightly exceeded net sales. Electromobility continues to play a minor role in the global vehicle market in absolute figures. Although new development projects for EMC filters for electromobility applications progressed in the reporting period, the number of ramp-ups remained below expectations.

Outlook

Schaffner expects sales and earnings to increase slightly in the second half of fiscal 2018/19 compared to the first half of the year, assuming stable economic conditions and constant exchange rates, and is aiming for an EBIT margin of around 6% for fiscal 2018/19. The medium-term targets remain the same, with an organic sales growth rate of 5% taken as a multi-year average basis and an EBIT margin at 8%–10%.

Contact

Marc Aeschlimann

Chief Executive Officer

T +41 32 681 66 01

marc.aeschlimann@schaffner.com

Christian Herren

Chief Financial Officer

T +41 32 681 66 01

christian.herren@schaffner.com

Half-year report

The complete Schaffner half-year report 2018/19 is available at:

www.schaffner-ir.com/reports/

Conference call

To access the conference call, proceed as follows:

Dial one of the following numbers before the scheduled start of the conference call:

+41 58 310 5000 (Europe) | +44 207 107 0613 (UK) | +1 631 570 5613 (USA)

Audio Webcast

To see the presentation of the half-year results, please go to the following link:

78449.choruscall.com/dataconf/productusers/schaffner/mediaframe/29484/indexl.html

Schaffner Gruppe | Key financials

Income statement | in CHF million

H1 2018/19

H1 2017/18

Net sales

101.4

108.3

EBIT

5.3

9.0

EBIT margin in %

5.2

8.3

Net profit

3.5

4.0

Earnings per share (EPS) in CHF

5.52

6.24

Free cash flow | in CHF million

-1.1

-1.6

Segment reporting | in CHF million

EMC division

Net sales

54.3

55.5

EBIT

7.6

7.5

EBIT margin in %

14.0

13.6

Power Magnetics division

Net sales

27.7

27.1

EBIT

-2.0

-4.51)

EBIT margin in %

-7.1

-16.71)

Automotive division

Net sales

19.5

25.7

EBIT

2.3

8.92)

EBIT margin in %

12.0

34.52)

Consolidated balance sheet  | in CHF million

31.3.2019

30.9.2018

Total assets

145.7

148.5

Current assets

105.0

110.5

Non-current assets

40.7

37.9

Total liabilities

84.8

89.5

Shareholders' equity

60.9

59.0

Equity ratio in %

41.8

39.7

Key share figures

 

31.3.2019

 

30.9.2018

Number of shares

635,940

635,940

Shareholders' equity per share  in CHF

95.72

92.80

Share price in CHF

231

343

Market capitalization in CHF Mio.

147

218

1)including restructuring costs          2) including one-time effects

Financial calendar

5 December 2019

14 January 2020

Publication of annual report 2018/19

24th Annual General Meeting

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